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E-biz love-in coming to an end. Part 1

by Daniel on October 3rd, 2011

We’re in the era of e-everything, and there is one simple fact that is soon to become, if you will pardon my expression, e-evident: many companies and anyone working with e-commerce and e-biz are setting themselves up for a fall. And from the edge of the precipice, the depth of the hole looks a lot scarier than it did with Y2K.

Why? Because with all the hype about e-biz, expectations are becoming ever more unrealistic. Never mind that the dot-com collapse helped bring some much-needed sanity back to the IT world. There are still lots of unfilled promises that may not be delivered upon as quickly as everyone hopes. And dashed expectations lead to finger pointing, recrimination and reduced opportunities for all.

Case in point. A year or so ago, the head of IT for a well-known oil company boasted at a high-profile conference that using e-biz tools to streamline business processes would save several hundred million dollars annually. Their plan, like many organizations, is to use the connectivity of the Internet and the sophistication of e-biz tools to change the way they do business with their customers and suppliers. The intent is the same as what exists at the foundation of many an e-biz project – let’s move to a world of electronic, rather than paper transactions, in our dealings with the outside world.

Now, the strategy makes eminent sense. All of us know that there’s massive cost and inefficiencies in paper-based systems. Hence, companies realize the worthy business strategy of reducing costs by applying sophisticated technologies in order to streamline and reengineer external business processes. It’s for this reason that the e-commerce cost savings mantra has taken over the prime spot in corporate e-biz strategies.

I’m the first to believe this is the most worthy and noble e-strategy we can pursue today. And yet, I differ from many, in that I’m convinced it’s going to take longer to implement such projects than people suspect. My suspicions were recently borne out after giving a keynote speech to a group of IT professionals. Afterwards, someone from that same well-known oil company came up to me, and in a conversation, indicated they were now working hard to manage expectations within the organization with respect to e-biz.

The problem? As they delved further into the world of e-biz, they realized things were far more complex than they’d thought. With the potential for egg on their face, they were now working to ensure that corporate expectations – as to the extent and timing of the cost savings that could be realized – were lowered dramatically.

Haven’t we been here before? Doesn’t the IT industry have a history of overstating things up front, and then failing to deliver? So why is everybody making the same darned mistake all over again? From my perspective, when it comes to e-biz, e-commerce and e-everything, all the easy work has been done. Companies have implemented effective online marketing strategies, a limited form of customer interaction, and in some cases, they’ve managed to put in place some type of online inquiry or ordering mechanism.

But in doing so, they’ve barely scratched the surface in terms of complexity. And given that they are now talking about complex supply-chain projects, massive CRM systems that pull in data from countless sources and repositories, and other efforts, can anyone expect them to get it right the first time?

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From → Communication

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